IC S01 - Exam Principles And Practice Of Insurance And Survey And Loss Assessment-44

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Q 1. What is the purpose of an insurance policy?

a) To protect against inevitable losses

b) To secure indemnity against accidents

c) To prevent all types of damage

d) To guarantee profits for the insured

e) To provide financial assistance for routine expenses
 
Q 2. In suspicious cases, what action might insurers take regarding salvage?

a) They may negotiate with the insured for salvage recovery.

b) They may take over the salvage to prevent double payment.

c) They may adjust the salvage value based on market demand.

d) They may demand compensation from the insured for salvage disposal.

e) They may refuse to consider salvage as part of the claim settlement.
 
Q 3. Why do income tax depreciation rates often result in a book value lower than the intrinsic market value?

a) They are too high

b) They are too low

c) They do not consider utility

d) They do not consider obsolescence

e) They are not standardized across asset classes
 
Q 4. What are the main purposes of keeping financial accounts?

a) Assessing marketing performance

b) Calculating employee salaries

c) Analyzing customer satisfaction

d) Ascertaining business results and financial position

e) Measuring production efficiency
 
Q 5. What type of additional coverage is available for Architects, Surveyors, and Consulting Engineers Fees under the standard policy?

a) Cover up to 5% of the claim amount

b) Cover up to 2% of the claim amount

c) Cover up to 3% of the claim amount

d) Cover up to 1% of the claim amount

e) No additional coverage available
 
Q 6. How does a Floating Policy differ from a Collective Policy?

a) Floating Policy covers specific positions.

b) Collective Policy provides broader coverage.

c) Floating Policy covers a group without individual amounts.

d) Collective Policy is suitable for large firms only.

e) Floating Policy is more expensive.
 
Q 7. Why are counter guarantees insisted upon in Excise bonds?

a) To reduce the premium cost

b) To expedite the bond execution process

c) To ensure payment of duties by manufacturers

d) To waive the bond requirement

e) To provide legal representation for manufacturers
 
Q 8. How are warranties different from representations in insurance contracts?

a) Warranties are oral statements, while representations are written statements.

b) Warranties are part of the contract, while representations are not.

c) Warranties must be made in good faith, while representations need not be.

d) Warranties are always material to the contract, while representations may or may not be.

e) Warranties are never incorporated into the contract, while representations always are.
 
Q 9. Why is the reduction and elimination of risks important?

a) To increase competition among businesses

b) To maximize potential losses

c) To protect the interests of individual businesses

d) To enhance the economic prosperity of the nation

e) To promote social unrest
 
Q 10. Under what terms can a buyer of goods cover the goods under a marine policy even if the ownership still vests in the overseas seller?

a) Free on Board (FOB)

b) Ex Works (EXW)

c) Cost, Insurance, and Freight (CIF)

d) Cost and Freight (CFR)

e) Delivered Duty Unpaid (DDU)
 
Q 11. What distinguishes the insurer's entitlement in cases of total losses versus partial losses under subrogation?

a) In total losses, the insurer is entitled to recover from third parties, but not in partial losses

b) In partial losses, the insurer has no entitlement, but in total losses, they have proprietary rights

c) In total losses, the insurer's rights extend only so far as the assured has been indemnified, unlike in partial losses

d) In partial losses, the insurer is entitled to take over the remaining property, unlike in total losses

e) There is no distinction between the insurer's entitlement in total and partial losses
 
Q 12. What defines a valued policy?

a) A policy with an adjustable sum insured

b) A policy with no maximum coverage limit

c) A policy where the sum insured is agreed upon at the commencement of the contract

d) A policy with premiums based on the insured's credit score

e) A policy with a fixed sum insured regardless of market fluctuations
 
Q 13. According to the policy condition, what is the maximum liability of the insurance company for total loss or constructive total loss of the vehicle?

a) The current market value of the vehicle

b) The insured declared value (IDV) of the vehicle minus the value of the wreck

c) The original purchase price of the vehicle

d) The sum insured mentioned in the policy document

e) None of the above
 
Q 14. What is a primary consideration for hydrant installations in buildings?

a) Ensuring they are connected to the general water supply.

b) Installing indoor hydrants on every story of the building.

c) Keeping the hydrant systems separate from sprinkler systems.

d) Fixing outdoor hydrants within 2 to 15 meters of the buildings.

e) Using standard hydrants to allow easy coupling for the fire service.
 
Q 15. What does the term "Indian re-insurer" refer to?

a) An insurance company specializing in life insurance

b) An insurance company operating exclusively in rural areas

c) An insurance company offering health insurance only

d) An Indian insurance company exclusively engaged in the reinsurance business

e) An insurance company providing services globally


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